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India, U.K. to set up £500m fund to finance green energy

India and the United Kingdom have plans to launch a £500 million ($623 million) fund, with the governments investing £240 million ($300 million), to finance clean energy projects in India.

“Both governments reaffirmed their commitment to anchor invest up to £120 million [$150 million] each in the joint fund which aims to raise around £500 million [$623 million] and has the potential to unlock much more in future," said a joint statement issued after the ninth U.K.-India Economic and Financial Dialogue.

Green Growth Equity Fund will be set up as a subfund of the Rs 400 billion ($6.2 billion) National Investment and Infrastructure Fund, which was formed in 2015 to finance greenfield and brownfield projects. The fund will focus initial investments on India’s energy and renewable market. A fund manager is expected to be selected later this year.

The fund is open to commitments from private investors. While government investment in the fund will be restricted to 49 percent, private domestic and foreign investors can hold the remaining 51 percent. These investors can invest in the umbrella fund or smaller sector- or project-specific funds within it.